Government advisor: The Ministry of Finance is preparing a three-year emergency plan to boost revenues.
Government advisor: The Ministry of Finance is preparing a three-year emergency plan to boost revenues.
2026-05-22
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, revealed on Friday five options to address the shortfall in financial revenues and restructure the Iraqi economy, in light of the challenges arising from the decline in oil exports and the closure of the Strait of Hormuz. He indicated that the Ministry of Finance is preparing a three-pronged emergency plan to boost revenues. Salih stated in a statement to the official news agency that “Iraq is facing a financial gap estimated at about $9.5 billion per month as a result of the decline in oil exports,” noting that “the Ministry of Finance is preparing a three-pronged emergency plan that includes internal and external borrowing, in addition to measures to maximize non-oil revenues through taxes, fees, and financial reforms.”
He also explained that “domestic borrowing is a quick solution to cover salaries and operational obligations, but it may lead to a withdrawal of liquidity from banks, an increase in the cost of local financing, and a weakening of private sector financing, while external borrowing provides liquidity in dollars and maintains relative monetary stability, but it is linked to reform conditions and an increase in debt service burdens.”
He added that “maximizing non-oil revenues is the most strategic option in the medium and long term, through controlling border crossings and customs, automating the tax system, reducing the informal economy, and improving collection without harming economic activity,” noting that “implementing the Government Financial Management Information System (IFMIS) contributes to strengthening financial oversight, reducing waste and corruption, and raising the efficiency of public spending management.”
Saleh stressed that “reforming the banking sector, especially Rafidain and Rasheed banks, is necessary to develop development finance, digital and credit services, as well as the importance of reforming private banks to achieve financial inclusion, support small and medium enterprises and attract investments.”
He explained that “activating the Public-Private Partnership Law would alleviate pressure on the general budget and create new job opportunities, provided that a stable legal environment, investment guarantees, and combating administrative corruption are provided,” stressing that “any emergency plan will not succeed without real financial reform that includes controlling operational spending, reducing waste in government contracts, and adopting spending priorities linked to production and development.” He added that “the current crisis represents a real test for the structure of the Iraqi economy, which is dependent on oil,” stressing that “accelerating financial and banking reforms and diversifying the economy will enhance the state’s ability to face geopolitical and economic shocks.”
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